Op-Ed: TMCs Remain The Best Data Sources

Measuring airline contract performance is not a new challenge. The first corporate contracts were literally copies of meeting and group agreements. These contracts were based on flights or revenue. Last year's meltdown of the industry proved the risk of revenue contracting. After Sept. 11, most revenue simply failed.

Airlines with corporate agreements based on share commitments did not have this problem. Share can be attained regardless of whether a company's spend increases or decreases. It is the single best measure for how well a company can direct its business. But how to measure a company's share and forecast the financial performance of a contract was problematic.

Airlines purchase marketing information data tapes to measure the airline share of business produced by IATA number. MIDT were granted antitrust immunity by the Federal Trade Commission to provide all airlines with data enjoyed by the CRS-owning carriers. When applied to corporate contracts, MIDT have three serious disadvantages: They do not identify the corporate customer, they do not include the ticket amount and they do not provide reliable net amounts because refunds are processed through the travel agency, not the CRS. Since companies have contracted discounts and can truly direct share, airlines need more reliable data for measurement.

As airlines experimented with share contracting, some relied upon reports produced by customers' travel agents. Summary in format, most often on paper, these data were entered by hand into databases by airline staff. One only can imagine the time and effort required for the consolidation of these data, and the number of input errors. These data have three disadvantages: Markets cannot be easily classified by contract requirement, the data lack a common cabin where discounting often occurs and the definition of origin and destinations are determined by the agency, not the airline.

Despite the problems with reports, agency-provided, detailed data meet the essential criteria: It identifies the customer, provides accurate amounts and net counts, and allows accurate definition of market pairs and cabin. With quality data, airlines can forecast financial performance, monitor fulfillment and settle deals.

Some customers have objected to the level of detailed data provided to the airlines. During the past two years, Prism again has worked with the travel agencies to establish air-only exports. It also has established the Airline Data Transfer Protocol, which protects traveler privacy and other airline confidentiality by masking and restricting data access. Additionally, data confidentiality agreements govern use of these data.

This past summer, the Airline Data advisory board released its specification for summary airline data to be provided from the three participating data consolidators. While we may debate the data format, there is no disagreement on the best data source—the source of the ticket, the travel agency. That part of the debate is settled. There is no substitute for rich data from the ticketing source. Travel agents' valued service is evident in the quality of their data.

Unlike MIDT, which airlines can purchase without the consent of the agency or the company, the company controls agency data. In Europe, where many companies can be identified by their IATA number, the European Commission has required MIDT suppliers to remove IATA numbers where it provides corporate identification.

The travel agency provides not only excellent data but agents ensure that no transfer occurs without the company's consent. Today, Prism safely consolidates data from 677 data sources worldwide for more than 3,000 companies. Out of this number, less than one in 300 companies have declined to furnish data.

Share contracting, measured with vivid data, benefits both company and airline. Accurate measurement of share deals has enabled airlines to open the door for corporate discounts to many small and midsize companies that would not have qualified for revenue deals. Midsize companies that can direct their business may earn competitive discounts with the largest companies. Thanks to share contracts, midsize companies can be the proverbial mouse that roared.

Soon, companies will have many ticketing sources, including third parties like Orbitz and booking through direct airline portals. Like the distribution channel, data is fragmenting. Companies and agencies will seek the quality data from these disparate sources. Agencies and companies that provide data today will seek data from the airlines tomorrow or their corporate reports will have holes where bookings have gone direct.

For airlines and companies to have the data that they require to manage travel, data parochialism must be replaced by collegial practices—meeting the company's requirements for privacy and confidentiality while providing reliable data that meet the needs of customer and airlines.

Michael Whitesage is president of Albuquerque, N.M.-based Prism Group Inc., a travel technology company that specializes in data management and information systems.